Lithuania: Economic growth remains resilient in Q2
Growth slows but remains among Euro area’s fastest: The economy grew 3.1% year on year in the second quarter, down marginally from the first quarter’s 3.2% rise. Still, the expansion was among the fastest in the Euro area and the strongest among the Baltic states. On a seasonally and calendar-adjusted quarter-on-quarter basis, economic growth waned to 0.3% in Q2, compared to the previous period’s 0.6% expansion.
Growth in public spending and exports cool: Domestically, government consumption—representing almost a fifth of GDP—expanded 1.0% in Q2, marking a six-quarter low (Q1: +2.0% yoy). Meanwhile, household spending increased 3.1% in the second quarter, which was above the first quarter’s 0.5% rise. Moreover, fixed investment growth was the highest since Q4 2023 at 9.1% in Q2 (Q1: +7.6% yoy).
On the external front, exports of goods and services growth moderated to 2.2% in Q2 (Q1: +4.1% yoy). In addition, imports of goods and services growth waned to 3.4% in Q2 (Q1: +10.3% yoy).
Panelist insight: EIU analysts said:
“Real GDP growth is likely to remain strong for a second consecutive year in 2025 […]. There are several factors supporting private consumption, including ECB interest-rate cuts; continued strong real wage growth; and the integration of Ukrainian, Belarusian and Russian workers into the labour force. Household spending was weak in January-March, most likely because of the hit to sentiment from US trade policy, but we expect it to return to growth in the remainder of the year. Government consumption growth will continue as more funding is shifted to the defence sector to bolster the country’s protections against Russia. ECB rate cuts and equipping the defence sector will help to underpin investment growth.”